Food Marketers Take Safer Course in Recession

Kraft, General Mills, Campbell Roll out Fewer New Products in Favor of Line Extensions

BOCA RATON, Fla. (AdAge.com) -- Fewer freebies, fewer new products and more line extensions marked this year's Consumer Analysts Group of New York conference, where major food companies try to dazzle investors.

The gathering is normally marked by marketer-sponsored meals and a mountain of giveaways for Wall Street analysts. At last year's luncheon, Kraft served up products including Bagelfuls, a indulgent cream-cheese-stuffed breakfast option, but this recessionary year the company offered salad in an effort to have analysts try its dressings, which are in the midst of a multiyear facelift and beginning to gain share. Campbell, meanwhile, served humble tomato soup.

Mostly about line extensions
Whereas previous years were marked by ambitious launches and re-branded lines, this meeting was mainly about line extensions or re-branding. Campbell emphasized it is reducing the sodium content across its soup portfolio, with 50% of its soups expected to have less salt than the original versions by fiscal 2010. General Mills is building on its success in the cereal category by offering new versions of its most popular brands, such as Banana Nut Cheerios. Kellogg Co. is launching savory cracker products tied to its Special K brand (a line extension), and a number of new Eggo waffles with flax and blueberries (also a line extension). An exception is General Mills' meal kits, launched in partnership with Macaroni Grill -- but then again, the linkup is with an existing brand.

Supermarket expert Phil Lempert said it's typical for companies to introduce fewer product launches during a downturn and the ones that do come out are generally "truly innovative." For example, he pointed to the steaming capability Con Agra has applied to it microwavable Healthy Choice meals, which the company says improves taste.

Mr. Lempert said that in the current environment marketers are making more tough choices than in the average recession, as retailers make tough choices about which brands they carry in stores. Products in the third-, fourth- and fifth-market positions are likely to be pushed off shelves. Marketers are going to invest more in fewer products, he said, and make sure that consumers are really clamoring for them.

"It's going to be about spending a lot of time on innovation, point of difference, advertising and building a relationship with consumers," he said.